Abstract
The characteristics of the Italian construction market and firm operations are reviewed. The analysis focuses on the environments of the late 1980s and early 1990s, during which major scandals and economic recession ended a business paradigm based on closed competition. Discussion builds upon a study of the market positioning of the 50 largest firms during the period under consideration that reflects the state industrial policy over the years. Long term transformations of the market require firms to develop new organizational capabilities and to shift their corporate focus from a production to a service orientation in order to remain competitive.